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Question

Under written down value method the depreciation amount ___________________ every year.

A
changes
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B
fixed
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C
increases
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D
none
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Solution

The correct option is A changes
Changes.
In written down value method, the depreciation is provided at a predetermined percentage, on the balance cost of asset after deducting the depreciation previously charged. It means under this method, the amount of depreciation changes every year.
For e.g. Cost of asset Rs. 100000
Rate of depreciation 10%
The amount of depreciation for 3 years is calculated as shown below:

Year

Balance cost of asset

Rs.

Depreciation

Written down Value (Rs.)

1

100000

10000

90000

2

90000

9000

81000

3

81000

8100

72900


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